XN000022-1986-01-17 — Page 4

FRIDAY, JANUARY 17, 1986

3

BILL AIMS AT FIGHTING TAX AVOIDANCE

****

A BILL AIMED AT FIGHTING TAX AVOIDANCE, AND WHICH INCORPORATES RECOMMENDATIONS FROM UMELCO, HAS BEEN PUBLISHED IN THE GOVERNMENT GAZETTE TODAY.

THE INLAND REVENUE (AMENDMENT) BILL 1986, WHICH WILL BE INTRODUCED IN THE LEGISLATIVE COUNCIL ON JANUARY 29, FOR FURTHER DEBATE ON FEBRUARY 5. HAD FIRST BEEN PUBLISHED IN JULY LAST YEAR IN DRAFT FORM FOR PUBLIC COMMENT, AND WAS THE SUBJECT OF EXTENSIVE CONSULTATION AND DISCUSSION.

A GOVERNMENT SPOKESMAN SAID TODAY THAT THE BILL LAYS DOWN THE LEGAL FRAMEWORK FOR THE IMPLEMENTATION OF THE ANTI-TAX AVOIDANCE AND TAX DEFERRAL PROPOSALS MADE BY THE FINANCIAL SECRETARY IN THE 1985 BUDGET SPEECH.

+THESE PROPOSALS HAVE BEEN THE SUBJECT OF EXTENSIVE CONSULTATION AND DISCUSSION, HE SAID.

AFTER THE DRAFT WAS PUBLISHED LAST YEAR, HE SAID, AN AD HOC INLAND REVENUE REVIEW PANEL WAS SET UP BY UMELCO +FOR THE PURPOSE OF REVIEWING THE BILL AND ASSEMBLING AND EXAMINING PUBLIC OPINION ON THE PROPOSALS+, AND ALL INTERESTED PARTIES WERE GIVEN AN OPPORTUNITY TO EXPRESS THE IR VIEWS. AS A RESULT, MANY REPRESENTATIONS WERE RECEIVED THROUGH UMELCO.

THE UMELCO PANEL, HE SAID, COMPLETED ITS REVIEW IN OCTOBER LAST YEAR AND SUBMITTED A COMPREHENSIVE REPORT ON THE DRAFT BILL, TOGETHER WITH RECOMMENDATIONS FOR CHANGES TO BE MADE.

+THE BILL PUBLISHED TODAY DIFFERS IN MANY RESPECTS FROM

THE DRAFT AND EMBODIES ALMOST ALL OF THE RECOMMENDATIONS OF THE UMELCO PANEL, HE SAID.

PUBLIC OPINION AS A WHOLE SUPPORTED THE PRINCIPLES OF THE LEGISLATIVE PROPOSALS, HE SAID.

HOWEVER, CONCERN HAD BEEN EXPRESSED OVER THE SEEMINGLY WIDE DISCRETIONARY POWERS WHICH THE DRAFT BILL GAVE TO THE COMMISSIONER OF INLAND REVENUE AND TO THE POSSIBLE RETROSPECTIVE OPERATION WHICH THE BILL MIGHT HAVE.

OTHER PROPOSALS AT WHICH CRITICISM WAS DIRECTED INCLUDED THOSE TO PROHIBIT ANY DEDUCTION FOR AN ACCOUNTING PROVISION AND TO RESTRICT DEDUCTIONS IN CONNECTION WITH CERTAIN LEASING ARRANGEMENTS OF MACHINERY AND PLANT.

THE SPOKESMAN LISTED THE FOLLOWING MAJOR CHANGES MADE TO THE DRAFT BILL:

(A) THE DELETION OF CLAUSES WHICH WOULD HAVE GIVEN RISE TO POSSIBLE RETROSPECTIVE EFFECT IN APPLICATION I

/(B) THE DELETION